WIRED 2.07 Features

Patently Absurd, Part 1

How could the Patent Office ever grant a patent to Compton's on
its claim to have invented multimedia?

This is how.

Simson L. Garfinkel takes us inside the Patent Office

Something is terribly wrong in Crystal City, and everybody who's
thinking about intellectual property knows it.

The problem is rooted in a federal office complex across the Potomac
River from Washington, DC, on the fourth floor of Crystal Park 2.
That is the home of the US Patent and Trademark Office's Group
2300, the group called "Computer Systems and Computer Applications."
Group 2300 is the one that's been carving up computer science and
handing out little monopolies to nearly half the people who take
the time to file a patent application.

Heather Herndon is a patent examiner in Group 2300. Herndon sits
at her desk in an office that's crowded but meticulously organized.
At her left is a pile of "file wrappers" -- bulging blue folders
held together with rubber bands and steel clips -- that hold patent
applications in progress. At her side is a Dunn 386 PC -- a cheap
IBM clone -- with a low-speed 2400-baud modem. All around her are
cabinets and drawers filled with paper files: mostly old patent
applications, as well as some particularly important articles that
summarize landmark advances in computer science. And on the table
right before her is a prime example of what all the fuss is about:
a software patent.

The really interesting software patents are the ones that examiners
like Herndon and attorneys around the country are fighting over
right now -- the ones that haven't yet been granted. And under US
law, the Patent Office is forbidden from discussing or revealing
any application in progress.

Because of the confidentiality rules, Herndon has prepared for this
meeting (one of the first granted by the Patent Office between a
journalist and an examiner on the subject of software patents) by
going into her files and finding a patent that's already been
issued. It's Patent Number 5,060,171, "a system and method for
superimposing images," issued to Stephen C. Steir, et al.

Steir's patent describes "an image enhancement system and method"
that shows people what they might look like with a different head
of hair. It uses a simple technique to combine an image of a person's
head with a second image of a disembodied hair piece: first you
find and smooth the boundary between the two images, then you figure
out a new color for each pixel in the boundary by averaging the
pixels in the nearby vicinity. The patent describes how you can
change the size of the hairstyle image, so that a single hairdo
can be placed over tall, thin heads or short, fat ones.

Read through Patent Number 5,060,171 and you'll learn everything
about how Steir's invention works. If you are a programmer, you
might be tempted to go home and throw together a few hundred lines
of C++ to try out the algorithm yourself. You might even demonstrate
that program to your bald Uncle Arthur, who happens to be considering
a hair transplant.

But if you do, you'll be breaking the law.

That's because Patent Number 5,060,171 gives Clearpoint Research
(the company to which Steir et al assigned their patents) an absolute
monopoly on the techniques it describes -- until October 22, 2008.
And that monopoly is backed up by the federal courts, the federal
marshals, and ultimately the entire United States Army.


Ignorance Is Not a Defense

There are three main ways to prevent people from ripping off your
intellectual property in the United States: trade secrets, copyrights,
and patents. But until recently, few programmers or lawyers bothered
to patent the techniques described by computer programs. Many people
thought that patenting computer programs was neither ethical nor
legal; most of the rest thought that it wasn't necessary.

Programs, after all, were protected by copyright laws. What's
fundamentally vexing about software patents is that they can be
unknowingly violated by any programmer, even one who has never
heard of the patent and who independently implements the invention.
What may seem like a trivial hack to a gifted programmer may already
be a patented routine.

Just about the only way programmers can protect themselves from
patent infringement is by paying for a patent search -- both a
time-consuming and an expensive process -- which still doesn't
conclusively determine whether or not a program is in the clear.

A patent search can cost anywhere from a few hundred dollars to a
few thousand. Simply finding the software patents can be a challenge,
since the Patent Office doesn't identify them as such. Then there's
the sheer number of software patents that the Patent Office has
issued: more than 12,000, according to Gregory Aharonian, who runs
the Internet Patent News Service, a free Internet mailing list that
tracks newly issued patents and developments in intellectual property
law. Aharonian has been tracking government-funded software for
the last ten years and patents for the last three.

Beyond the Patent Office, complications are born of the nature of
software itself. Develop a new drug or a new electronic circuit:
seeing whether the invention has ever been patented before is a
fairly straightforward task. But after nearly a decade of granting
software patents, the Patent Office still hasn't come up with a
system for organizing them that's in a language that most programmers
can understand. Many software patents -- such as Patent Number
5,060,171 -- don't even have the words "computer," "software,"
"program," or "algorithm" in their abstracts, making them harder
to locate for those unfamiliar with the terrain. And no easy way
exists to take a few lines or a page of computer code and get a
list of the patents that it might violate. Identifying all of the
patentable inventions inside an entire program is nearly impossible.
A typical piece of software might violate three. Then again, it
might violate a hundred.

So, patent searches for computer programs become expensive
propositions. But violating a patent can be more expensive still.
According to Stanford University Professor John Barton, patent
infringement suits are among the most expensive kind of litigation
in the US today, with the average cost of a patent suit being
US$500,000 per side per claim. Not surprisingly, the cost of
insurance to protect companies against patent infringement is
equally steep: $50,000 per product with a $50,000 deductible in
the case of multimedia software, says Rob Lippincott, president of
the Interactive Multimedia Association, a trade organization for
large and small multimedia publishers. "These kinds of numbers are
basically intolerable," says Lippincott, adding that the cost of
merely defending an infringement will wipe out most small software
houses, whether they win or lose.

But merely defending an infringement suit is peanuts next to losing
one. Just ask Microsoft, which was found guilty by a jury of
violating STAC Electronics's patent on data compression in February
1994. The cost: $120 million in compensatory damages.

The alternative to a lawsuit, of course, is licensing any software
patents that a program might happen to infringe. But then the costs
can really swell. For instance, the REFAC Technology Development
Corporation of New York holds Patent Number 4,398,249 on natural
order recalculation. In 1989, REFAC sued Lotus, demanding 5 percent
of all revenues from Lotus 1-2-3. Five years later, the case is
still pending in a New York federal court. And last year, when
Compton's New Media, a division of Tribune Co., was awarded a
far-ranging patent in multimedia databases, the company indicated
that it wanted 1-3 percent of net revenue for any potentially
infringing multimedia product. License just a few of these patents,
and you've licensed away your profit margin.

Such dangers terrify small businesses, shareware authors, and people
writing free software. A person writing a simple utility can find
himself or herself at the wrong end of a multimillion-dollar lawsuit
for lost profits, with treble damages if a court finds that the
infringement was "willful." "Software patents turn every decision
you make while writing a program into a legal risk," says Richard
Stallman, one of the leaders of the opposition to software patents.
"They make writing a large program like crossing a minefield. Each
step has a small chance of stepping on a patent and blowing you
up."

The League for Programming Freedom, which Stallman helped create,
has called for the elimination of patents that apply to computer
programs. But it may be too late for such sweeping and simplistic
reforms.


Who Are These Guys?

At the heart of the software patent crisis is the Patent and
Trademark Office itself. In recent years, the office has issued a
steady stream of patents on techniques that nobody would have dreamt
patentable just a few years before. The patents can be dauntingly
broad. Recently, for example, the Patent Office awarded Patent
Number 5,173,051, which describes a system for "curriculum planning
and publishing" using a computer and a videodisc player. The patent
was filed October 15, 1991, by Optical Data Corporation of Warren,
New Jersey, and issued December 22, 1992 -- record time for a patent
that, in the words of Harvard researcher Brian Kahin, "makes out
millions of teachers to be infringers."

Then there is Patent Number 5,105,184, the so-called "Energizer
Bunny Patent," issued in 1992 to Software Advertising Corp. It
covers "displaying and integrating commercial advertisements with
computer software" -- in other words, any advertisement integrated
into a screen saver. Or Patent Number 5,263,127, granted last year
to an enterprising engineer at Digital Equipment Corp., which
patents a technique used in object-oriented programming that can
be implemented by using exactly two machine-language instructions.

This year, the Patent Office will issue more than 100,000 patents,
4,000 of which could be classified as software patents, says Gregory
Aharonian. Since it typically takes two to four years for the Patent
Office to grant a patent, and since newly issued patents apply
retroactively to any product that was created after the patent
application was filed, companies that want to avoid an infringement
suit need to keep track of the new patents -- a full-time job for
a team of highly trained people.

As a result, few developers realize that they are infringing a
patent until "they get the letter from the law firm that they've
never heard of in the city they've never been to that says they
are infringing US Patent Number so-and-so," says Robert Merges, a
professor of patent law at Boston University.

One person who found himself on the wrong side of such an infringement
suit is Vern Blanchard, a programmer whose company was destroyed
by a patent that wasn't even valid.

Blanchard is president of American Multi-Systems, a San Diego-based
company that wrote a program to let professional bingo players play
dozens of bingo cards at the same time. The program runs on an IBM
PC. Blanchard was ready to start marketing his system, along with
custom-built tables and personal computers, to the big-time bingo
halls, when one of his competitors filed suit against American
Multi-Systems for patent infringement.

The case should have been thrown out of court for two reasons, says
Blanchard. For starters, he says, his competitor's patent "covered
a hand-held calculator type device," not a general-purpose computer
running a program. And the patent couldn't cover general-purpose
computers, he says, because programs that play bingo are commonly
written by students in introductory computer science courses. There
was simply nothing novel or new about the technique that the patent
described, and novelty is a basic requirement of patentability.

Nevertheless, says Blanchard, the company that held the patent was
able to convince a judge to grant a preliminary injunction that
took American Multi-Systems's product off the market.

Eventually Blanchard discovered a critical piece of "prior art" --
concrete evidence that the invention described by the patent had
been thought of before by somebody else -- and was able to convince
the judge to lift the preliminary injunction. Unfortunately, by
that time American Multi-Systems had effectively put itself out of
business with legal fees.

"Judges are not particularly literate in technical issues," says
Blanchard. "When they see a patent they presume that it's valid,
as they should. (To them), if the Patent Office says that this is
a valid patent, well, of course it's a valid patent."

In practice, these simple rules have created headaches for the 150
patent examiners of Group 2300.

In order to be a patent examiner, you've got to have a college
degree in science or engineering, including at least 30 credit-hours
of specific science-related courses, before applying for the job
and taking an exam. Once you are hired, the Patent Office's in-house
training takes over.

Upon hiring, every examiner gets an intensive two-week course that
teaches the basics of patent examination -- the standards of
patentability, where to look to find prior art, and how to evaluate
patent documents.

That course is followed by four more two-week sessions over the
next eight months. But the real training for a new patent examiner
comes on the job. Each new examiner's supervisor has the ultimate
signature authority over the newcomer's patent applications. Trainees
don't get to sign their own patents until they've been at the Patent
Office between three and five years.

The Patent Office has gotten quite good at recruitment and training.
It has to be: few examiners stay on for more than a few years. This
despite the benefits that being a patent examiner carries: high
pay by federal standards ($38,000 to $75,000 a year, before overtime),
flex-time arrangements, and tremendous job satisfaction.

At the same time, the job invites burnout. Each examiner has a
quarterly quota that must be filled. As a result, examiners frequently
put in overtime: up to 40 hours every two weeks. Since applications
must be held in the utmost secrecy, examiners are forbidden to work
at home, which makes long hours even less attractive.

Then there is the honey pot of private practice.

The Patent Office encourages its examiners to take courses at nearby
law schools so that they can improve the job they do. Unfortunately,
the idea frequently backfires: soon after examiners earn their law
degrees, they frequently leave the government for a lucrative job
in private practice on the other side of the patent bar.

"I know somebody who recently left the office who had been in there
approximately three or four years. Their take-home pay doubled when
they left the office. And they expect increases in salary of $15,000
to $20,000 over the next year," said David Clark, a patent examiner
dropout.


Idea vs. Implementation

No matter how good it is, you can't patent an idea in the United
States: patents are only awarded in this country for usable inventions
that accomplish tasks.

Computer programs, occupying that strange world between mathematical
ideas and applied engineering, have posed a problem for the courts
since the 1960s. On the one hand, the public has traditionally
viewed computer programs as mathematical. On the other hand, programs
can solve real problems.

In 1972, the US Supreme Court spoke for the first time on the
subject of software patents. In the case of Gottschalk v. Benson,
the court denied a patent on a system for converting binary-coded-decimal
numbers into decimal numbers. The Court's decision was based on
the notion that code was preeminently mathematical. The Court's
decision said, in part, that if patents on algorithms were allowed,
"the patent would wholly preempt the mathematical formula" for
other uses.

Faced with the Court's ruling, patent attorneys simply bypassed
the problem by framing the language of their patent applications
so that software inventions seemed like hardware devices. For
example, in July 1973, AT&T filed for a patent on the fundamental
technique used by the Unix operating system to enforce computer
security (this eventually came to be known as the SUID Patent).
But instead of describing the invention as a software code, AT&T's
attorney, Stephen Phillips, described the invention with a circuit
diagram containing 11 chips connected by more than 40 wires. (The
patent was granted in January 1979 but was dedicated to the public
domain just ten months later.)

Disguising software patents with hardware implementations was a
common trick, says Rick Jordan, patent counsel at Thinking Machines,
a maker of supercomputers. "Instead of being up-front about the
fact that their product was embodied in software, people would go
through subterfuge to make it look like a product was embodied in
hardware," and thus make it eligible for a patent as a device which
performed a process or embodied a technique.

But Phillips needn't have bothered with his subterfuge. Just five
years after the Benson case, the US Court of Customs and Patent
Appeals reinterpreted the Supreme Court's decision. In a case called
In re Freeman, the appellate court upheld a patent on a system for
typesetting mathematical equations, arguing that the Supreme Court
really meant that the Benson case only forbid patents on "mathematical
algorithms." Unfortunately, the appellate court neglected to define
the term "mathematical algorithm."

The search for the proper definition of the term "software patent"
may be moot, argues Joe Dixon, a supervisory patent examiner who
runs Art Unit 2312, or "Storage and Retrieval." He adds: "We do
not grant 'software patents.' " What the Patent Office grants,
insists Dixon, are patents on methods or processes that can be
embodied in computer programs. This is the reason that words like
"software," "program," and "algorithm" don't usually appear in
abstracts of most so-called software patents: the law is indifferent
as to whether the invention is built with a program or with a bunch
of integrated circuits and wires.

 Obtaining software patents got easier in 1981, when the Supreme
 Court ruled in favor of a patent applicant in Diamond v. Diehr.
 In that case, Diehr had applied for a patent on a system for
 vulcanizing rubber that used a computer program to control the
 temperature of the rubber mold. The Court ruled that the patent
 application's inclusion of a computer program didn't render the
 application unpatentable. In essence, the 1981 decision gave the
 clear impression to the lower courts and the Patent Office that
 the Court felt software patents were OK. Since then, the number
 of software patents granted each year has nearly doubled.

(story continued, see _Patently Absurd, Part 2_)


Simson L. Garfinkel (simsong@mit.edu) is a computer consultant and
science writer.


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Transmitted:  94-07-19 19:44:48 EDT